View this newspaper clipping for FREE!
Start 7-Day trial. Get unlimited access to millions of newspaper pages
Start Free Trial NowTitle: Turned on to Channel 48: General manager Gene Bohi is, but can he turn viewers on?
Description: Triad Business Weekly 10 & 11; WGGT; WXLV
Greensboro News & Record, Monday, April 4, if*7 Greensboro News A Record, Monday, April 4,1987 10 Triad Business Weekly 11 COVER STORY Turned on to Channel 48 General manager Gene Bohi is, but can he turn viewers on? By BRADLEY JOHNSON Staff Business Writer Pity poor Channel 48. The independent Greensboro station filed for bankruptcy reorganization and protection from creditors last December, listing liabilities of $14.7 million and assets of $5.5 million. WGGT-TV owes money to Columbia Pictures, MGM, Twentieth Century Fox and other Hollywood and New York tele vision syndicators. As the Triad’s only locally owned major commercial station, it has little clout in cutting deals with show suppliers. Its esti mated audience share has Men in half over the past year. Meanwhile, the station’s local indepen dent competitor — Winston-Salem’s Channel 45, WNRW-TV — was sold in December for about $10 million to sitcom guru Norman (‘All in the Family’) Lear, who hopes to build a chain of TV stations. Channel 45, already part of the growing Fox Broadcasting network, is likely to spend more bucks on programming under its new owner —making life more diffi cult for 48. So why is 48’s president and general manager, Gene Bohi, smiling? Partly because he’s a persuasive and upbeat showman who likes challenges. Partly because he thinks he has found a solution to 48’s financial troubles. And partly because he didn’t create the prob lem at 48; he was hired last summer to fix it. Bohi says he entered Chapter 11 reor ganization Dec. 31 as part of a carefully plotted strategy to jettison unwanted pro gram contracts. “It was a very cold, calculated strategic move, preplanned and executed in exactly the way we wanted it done,” said Bohi, who believes he is properly employing federal law to reorganize a vital business. “There was one purpose, and that was to unload the contracts (on unused pro grams) and gain protection from the courts from any litigation that would be forthcoming. “Once we get rid of those contracts,” he added, “the station can be very profitable, and it can pay its way.” While 48 reworks its debts, the station is paying its current bills and remains on the air. Bohi also has cut costs across the board. He expects money coming in this month to exceed money going out — for the first time since 1984. Bohi (pronounced boe-high) says 48 got into a box when former management over paid for programming, for the most part reruns of network shows. “There was too much programming pur chased at too high a price where there was no concern given to return on invest ment,” said Bohi, a veteran of nearly four decades in television, including 10 years as top executive at Channel 8, WGHP- TV, ABC’s High Point affiliate. Bohi will ask bankruptcy court for per mission to reject contracts for many of the programs that haven’t yet aired. If the court goes along, it will have to decide whether the syndicators are due any dam ages as a result. Bohi says they aren’t; some creditors are pushing to collect the entire amount. “There’s going to be a difference of opinion, which is a polite way of saying we’re going to fight,” he said. Bankruptcy court has three options for 48: Reorganization by current owners and management, reorganization by new man agement, or liquidation. Liquidation could mean sale or, less likely, going off the air. “This case is no different from any other case,” said Eric Handler, a Greensboro attorney representing Coca-Cola Co.’s Co lumbia Pictures and its $2.3 million claim. “The possibilities are reorganization through sale, reorganization not through sale, or liquidation.” Handler says the chance that 48 will go off the air is “re mote.” An earlier deal to sell the station for more than $10 million fell through in late 1985. But Jake Froelich, a High Point businessman and board member of 48’s owner, Guilford Telecasters, says the hoard intends to stay with 48 for the long term. The station is owned by a group including Froelich, High Point car dealer George Lyles, several people from Dur ham, and some out-of-state investors. Jan Samet, the station’s High Point at torney, hopes to file a plan for reorganiza tion this month, and Bohi thinks it will take about a year for 48 to right itself. But while ever-buoyant Bohi continues to look beyond bankruptcy by plotting 48’s five- year plan, some creditors say it’s too early to predict the outcome. Several major creditors, including MGMLJA Entertainment and Twentieth Century Fox, declined to comment. At torneys for several others, including Co lumbia and Petry Television, which sells national advertising spots for 48, declined to speculate. “I would say at this point it is too early of a call,” said David B. Newman, a New York attorney representing Petry. But Newman added, “There is reason to be cautiously optimistic.” Troubles at 48 reflect troubles in the young but maturing independent televi sion industry. So-called “indies” — stations not affili ated with a major network — have been around since the early days of television in the 1949s, but most of the growth has been recent. Channel 45, for example, signed on in 1979, initially as a low-powered station. Channel 48 signed on in 1981, taking the place of a smaller station that collapsed in the early 70s. The number of independent stations na tionally more than doubled — to 283 — during the first half of the decade, accord ing to a study done for an industry group. During this same period, the study says, the cost of programming more than doubled as stations eager for quick ratings success bid up prices on popular reruns. Increasing costs were manageable dur ing periods of double-digit inflation, when stations found it easier to raise advertis ing rates. But receii shortfalls in reve nues — caused by a slowdown in advertis ing coupled with low^nflation — along with greater competition from cable TV and video cassettes hare caused difficul ties for 48 and others. A number of inde pendents — including a chain of indies owing more than $200 million — are looking for answers in baritruptcy courts across the country. “The problem with independent stations for the most part is that too many stations went on the air that were underfinanced and undermanaged,” said Bohi. The worst may be over for indepen dents that can survive the shakeout. Stronger management is taking over at many. Prices of programming and of inde pendent stations themselves appear to have peaked. Syndicators are facing the problems by adding to their bad-debt re serves and scrutinizing the financial state ments of their TV station customers. A recent programmers convention even in cluded a seminar on bankruptcies. But there are questions whether the Triad can support two independents. “I think if they're both run right, the market could support both,” said Chuck Wolfertz, vice president at Victory Tele vision, a New York-based syndicator. “But it’s a pretty close call.” Channel 45 isn’t divulging its strategy except to say it will be backed up with some bucks and additional offerings from Rupert Murdoch’s new Fox network. “We hope to be so good that there’s not room for anybody else. Even if there’s somebody else on the air, we’ll be the independent,” said Richard Ballinger, a programming veteran and senior vice president with 45’s new Atlanta-based owner, Norman Lear’s Act III Broadcast ing. Bohi says there is room for both — “unless 45 wants to throw in the towel.” “I think they’re more worried about us than we’re worried about them,” said Bohi, who refuses to play the role of un derdog. “They’re going to have a lot of problems because they’ve not had (strong) competition (from 48). It’s going to he fun to watch. It’s going to add to the chal lenge.” For now, Bohi is behind in the ratings. Arbitron estimated 48’s share of the TV audience at 2 percent in February, down from 4 percent a year earlier. Channel 45’s share was 4 percent, down from 5 percent. In contrast, Channel 2, the Greensboro CBS affiliate and the Triad’s top-rated station, attracted an estimated 35 percent share of the Triad’s TV view ers in February. Bohi professes not to be worried about ratings, saying he’s more interested in the lottom line. “I would rather be second aid making a lot of money than be first aid losing a lot of money,” he said. But Bohi expects ratings to rebound as viewers get accustomed to programming dianges. It is difficult for 48 and other indepen dents to meet the deep-pocketed network affiliates head on. But Bohi believes he can secure a niche for 48 by providing viewers an alternative to the affiliates’ shows. At 6 p.m., for example, he offers “I Dream of Jeannie” — a “totally inoffen sive” sitcom — for people who don’t want to watch the news. At 7 p.m., he airs movies as an alternative to the game shows and sitcoms on other stations at that hour. “You don’t do what the other person is doing,” he said. “You do what they’re not doing and do it well.” Bohi believes syndicators — the firms that sell programming — would benefit from having two independents in the Tri ad. Analysts back him up. “If Channel 48 goes out of business, that’s one less customer to sell to,” said Alice Schneider, an analyst with Paul Ka gan Associates, a Camel, Calif., broad cast consulting firm. Bohi has faced his programming credi tors head on. After his ffiing, he flew to California to meet with syndicators, whose cooperation he needs so that his source of supply doesn’t dry up. “As a result,” he said, “we haven’t had a problem.” Since Jan. 1, the station has operated in a pay-as-you-go status. The station, he says, has nothing to hide and everything to gain by being forthright with its story. Bohi and attorney Samet say they have encouraged creditors to visit the station and look over the records if they have any doubts. It’s part of a strategy of openness and candor. “The key to this reorganization is the relation with the film suppliers,” Samet said. “If we are able to find common ground that is of benefit to all of us, then we are in great shape. If we’re not, we’re still going to reorganize, but it will be more difficult.” Bohi thrives on challenges, and he is putting his reputation on the line with 48. “I’ve known these people for years. They’ve known that I’ve always paid my bills, not only in this market but in oth ers,” he said. “I don’t shoot from the hip. I know what I’m doing and I’m good at it. If that’s an ego, it’s an ego. I don’t apologize for it.” Bohi has been in television since 1949, when he took a job at a fledgling Detroit station while a student at the University of Michigan. Liking what he saw, he changed his major from geology to radio and television. He later worked for CBS and NBC in New York, Chicago and Cleveland and put in time at stations in Wichita, Kan., and Albany, N.Y., before moving to High Point and Channel 8 in 1973. Bohi turned around a struggling station in Scranton, Pa., before taking the 48 assignment. “What’s really fun is to take something that’s broken and fix it,” he said. Some creditors have taken notice. “Our experience with Gene has been Assets Liabilities Cash accounts receivable $486,306.64 Equipment $1,536,600.00 License value $3,477,091.36 Total $5,500,000.00 Secured debt 1 $4,396,520.16 Rejected unused film contracts 2 $6,463,349.00 Debt on used film contracts $2,689,059.00 Unused film contracts 3 $1,020,697.58 Non-film debt $163,600.25 Total $14,733,225.99 11ncludes $4,062,975.15 owed to Continental Bank, Chicago, on 1984 loan. 2 Station intends to ask court to reject these, after which program syndicators could ask for damages. 3 Station wants to keep these program contracts for future broadcast Figures as of Dec. 31,1936 Source: Channel 48 excellent,” said Victory’s Wolfertz, who has continued to supply “Streets of San Francisco” episodes even though Victory is a creditor. “With us, anything he has said he is going to do has been done. .. . That’s why a lot of guys like us are really willing to work with him.. . . We feel he is going to turn the situation around.” Adds Handler, Columbia’s Greensboro counsel: “It’s just too early to know what’s going to happen, but certainly Bohi’s ex perience is a plus and gives (48) a better chance.” Bohi impresses his optimism onto em ployees, creditors, anyone who will listen. Or watch. Bohi went on television after his bankruptcy filing to explain the situa- Production manager Ken Terres, at left in the station’s control room, is among WGGT’s staff of. 36 people. Staff photos: Rob Brown the move. But it was part of Bohi’s strate- gy- “When people file for bankruptcy, the perception is you’re going out of busi ness,” he said. “We wanted to tell people we were remaining on the air:” He’s made the same pitch to advertis ers, who are given transcripts of his on-air commentaries. Bohi does what is necessary to keep things under controL When he learned a” salesman at a station that he wouldn’t identify was making derogatory com ments about 48 to advertisers, Bohi says he called the station and threatened to seek a restraining order. Bankruptcy or not, Bohi says, advertis ers will buy time on 48 if it delivers cus tomers. Ad revenues are about even with last year, he says. But because expenses have been cut about 25 percent, Bohi expects money coming in this month to begin ex ceeding money going out. “A bankruptcy can be a very advanta geous maneuver for taking a business that has been as loose as ashes and structuring it,” he said. Through attrition, Bohi has reduced the total payroll to 36 employees, down from 41. But Bohi has attracted several veteran managers and says he has upped the sala ries for other staffers. “The station benefits from his industry expertise and his ability to attract the types of people that are necessary,” said Robot Reid, a vice president at 48’s big gest secured creditor, Continental Illinois National Bank and Trust Co. of Chicago. The station owes the hank $4 million. Bohi is paying attention to other ex penses. To reduce overhead, he has cut back on space, travel costs and office ex penses. In returning calls to syndication salespeople, Bohi calls collect, saving about $500 a month. He also'has impressed upon his staff the benefits of photocopying on both sides of a sheet, reusing paper clips, selling piles of junk mail and scrap paper to recyclers, and writing on homemade scratch pads rather than the trendy but expensive, sticky Scotch Post-It pads. “I laughingly tell the people here that I am frugal, and they say, ‘No, you’re cheap,’ ” he said. But he adds: “When everyone becomes cost conscious on every item of your oper ation, it’s incredible how much can be cut out in expenses in your month-to-month operations.” Bohi says he will spend on vital areas — equipment, programming, promotion — that yield a return on investment. “You'' don’t cut costs where it matters,” he said. “You cut costs where it’s waste.” Bohi runs a broadcast consulting busi ness on the side, but he’s not saying what he will do when and if he turns around 48. Suggests Victory’s Wolfertz: “I think if he pulls this off, he could be in demand.”
egg_and_dart
Clipped 1 year ago
- Greensboro News and Record
- Greensboro, North Carolina
- Apr, 6 1987 - Page 48